DoD's $12.56M contract for ammunition manufacturing awarded to Armtec Defense Products Co

Contract Overview

Contract Amount: $12,563,049 ($12.6M)

Contractor: Armtec Defense Products CO.

Awarding Agency: Department of Defense

Start Date: 2007-03-30

End Date: 2009-08-17

Contract Duration: 871 days

Daily Burn Rate: $14.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: M204 INCREMENT CONTAINER

Place of Performance

Location: COACHELLA, RIVERSIDE County, CALIFORNIA, 92236

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to ARMTEC DEFENSE PRODUCTS CO. for work described as: M204 INCREMENT CONTAINER Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $12.56 million falls within a moderate spending range for defense procurement. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for scope changes. 4. The duration of 871 days indicates a medium-term supply requirement. 5. Awarded by the Department of the Army, this contract supports ammunition production. 6. The North American Industry Classification System (NAICS) code 332993 points to a specialized manufacturing sector.

Value Assessment

Rating: fair

Benchmarking the value of this $12.56 million contract requires more granular data on specific ammunition types and quantities. However, for a defense contract of this nature, the price appears to be within a typical range. Without specific unit cost data or comparisons to similar contracts for identical or comparable ammunition, a definitive value-for-money assessment is challenging. The firm fixed-price structure suggests that the contractor assumed the risk of cost overruns, which can be a positive indicator if the price was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. This suggests a robust competitive environment, which typically leads to better price discovery and potentially lower costs for the government. The number of bidders is not specified, but the designation implies that the Army sought the most advantageous offer through a broad solicitation process.

Taxpayer Impact: A competitive award process like this generally benefits taxpayers by ensuring that the government is not overpaying for goods and services, as multiple companies vie to win the contract.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will receive the manufactured ammunition. The contract delivers essential ammunition, crucial for military operations and readiness. The geographic impact is primarily centered around the contractor's facilities in California. The contract supports jobs within the defense manufacturing sector, specifically in ammunition production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contracts if competition diminishes.
Dependence on a single contractor for a specific type of ammunition could pose supply chain risks.
Limited transparency on the specific performance metrics and quality control measures for the ammunition produced.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract type provides cost predictability for the government.
Contract supports a critical defense need for ammunition.

Sector Analysis

The defense manufacturing sector, particularly ammunition production, is a critical component of national security. This contract falls under the broader industrial base that supports military readiness. Spending in this area can fluctuate based on geopolitical events, military modernization programs, and existing inventory levels. Comparable spending benchmarks would typically involve analyzing historical contracts for similar ammunition types and quantities awarded by various branches of the U.S. military.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting goals. As a defense manufacturing contract, it is possible that larger prime contractors are involved, and further analysis would be needed to determine the extent of small business participation, either directly or through subcontracting opportunities. Without specific information, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. Accountability measures are embedded within the contract terms, including delivery schedules and quality specifications. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. The Inspector General's office within the DoD would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Ammunition Procurement
Army Weapons Systems Support
Defense Industrial Base Contracts
Ordnance Manufacturing Contracts

Risk Flags

Potential for supply chain disruption
Quality control concerns
Schedule adherence risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to ARMTEC DEFENSE PRODUCTS CO.. M204 INCREMENT CONTAINER

Who is the contractor on this award?

The obligated recipient is ARMTEC DEFENSE PRODUCTS CO..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $12.6 million.

What is the period of performance?

Start: 2007-03-30. End: 2009-08-17.

What is the specific type and quantity of ammunition covered by this contract?

The provided data indicates the contract is for 'Ammunition (except Small Arms) Manufacturing' under NAICS code 332993. However, the specific type and quantity of ammunition are not detailed in the given information. This level of specificity is crucial for a thorough analysis of unit costs, performance, and value for money. Without this detail, comparisons to other contracts or market rates for specific ammunition types are not possible. Future analysis should seek to identify the precise munition procured to better assess its strategic importance and cost-effectiveness.

How does the unit cost of this ammunition compare to similar contracts awarded by the DoD?

A direct comparison of unit costs is not feasible with the current data, as the specific type and quantity of ammunition are unknown. To perform such a comparison, one would need to identify contracts for identical or highly comparable ammunition types awarded around the same period. Factors such as lot size, specific technical requirements, and the competitive landscape at the time of award significantly influence unit pricing. A comprehensive analysis would involve querying contract databases for similar items and normalizing prices by quantity and inflation to establish a reliable benchmark.

What is Armtec Defense Products Co.'s track record with similar DoD contracts?

Armtec Defense Products Co. has a history of contracting with the Department of Defense, as evidenced by this award. A deeper dive into their contract history would reveal their performance on previous ammunition supply contracts, including on-time delivery rates, quality compliance, and any past performance issues or awards. Analyzing their portfolio of past contracts can provide insights into their capabilities, reliability, and experience in fulfilling large-scale defense manufacturing requirements, which is essential for assessing future performance risk.

What are the potential risks associated with this contract for the Department of the Army?

Potential risks include supply chain disruptions affecting the availability of raw materials or components, potential quality control issues with the manufactured ammunition, and schedule delays impacting military readiness. Given the firm fixed-price nature, cost overruns borne by the contractor could lead to pressure to cut corners on quality or delivery. Furthermore, over-reliance on a single source for critical ammunition types, even if awarded competitively, can pose a long-term strategic risk if alternative suppliers are not cultivated.

How has spending on ammunition manufacturing (NAICS 332993) trended within the Department of the Army over the past five years?

Analyzing historical spending trends for NAICS 332993 within the Department of the Army requires access to detailed procurement data over the specified period. Such an analysis would reveal whether spending has increased, decreased, or remained stable, potentially correlating with shifts in military strategy, operational tempo, or modernization efforts. Understanding these trends provides context for the current contract's value and helps in forecasting future budgetary needs for ammunition procurement.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52P1J06R0028

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Esterline Technologies Corporation (UEI: 043190826)

Address: 85-901 AVE 53, COACHELLA, CA, 25

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $12,563,049

Exercised Options: $12,563,049

Current Obligation: $12,563,049

Timeline